UK shoppers set to spend £20.6bn on Christmas food and groceries

14 December, 2016

The UK grocery market is set to experience 1.2% growth over the Christmas period, with shoppers spending £20.6bn, according to forecast figures from IGD.

Joanne Denney-Finch, chief executive of IGD, said: “Although our forecast indicates relatively modest growth, with overall prices lower than a year ago, this would represent a strong result for retailers and manufacturers.

“We expect online shopping again to generate the fastest growth this Christmas, with a predicted 9.3% uplift generating £1.2bn in sales. The launch of Amazon Fresh and of Aldi Online this year extends shoppers’ choice and people will also benefit from more one-hour delivery slots, shorter lead times and the growing availability of click and collect from established players.

“We predict the discounters will enjoy growth of 6.2% this Christmas, hitting sales of £2bn. This would be another good result, although with a stronger proposition from the leading supermarkets on ranging, price and the in-store experience, we don’t think the discounters will grow by quite as much as this time last year.”

However savvy shopping endures, according to Denney-Finch: “For many shoppers (54%), Christmas is a time to splash out on food and groceries, yet the savvy shopping habits established over many years still apply during the festive period. Almost half (46%) collect coupon points on their loyalty cards to use at Christmas, representing a clear opportunity for retailers to lock in purchases.

“By mid-November, more than half of shoppers (53%) had already bought some food and grocery items for Christmas but this doesn’t mean we will avoid the usual late rush. Six in ten (63%) of those early shoppers expect to use up and replace at least some of the festive items already purchased.”

However, Christmas is a season of opportunity for retailers: “While many shoppers do shop in advance, this is also a time for spontaneous and adventurous purchases," insisted Denney-Finch. "More than half of shoppers (53%) say they buy food and grocery products on impulse at Christmas and the true figure is probably even higher. One in four (40%) is particularly open to trying new products at this time of year and a quarter (26%) say browsing in supermarkets helps inspire them for their Christmas meals, so this is a time for retailers to put the spotlight on innovation.”

IGD’s latest data also demonstrates the importance of food and drink in marking the countdown to Christmas, according to Denney-Finch. She said: “Along with the usual festivities of putting up the Christmas decorations and hearing their first round of Christmas music, our findings show that food and drink signifies the start of the season for many shoppers. A quarter (26%) see festive retailer adverts appearing on TV as the first signal that Christmas is coming, while 15% say starting to enjoy their favourite festive food or drink marks the beginning of the celebrations.

“Competition is set to be as intense as ever and not only on price. Those retailers and suppliers who combine to offer excellent value plus a compelling in-store experience will capitalise on the strong emotional connection between food, drink and Christmas.”